Primark is to end its online trial with Asos and had insisted it has no plans to launch its own transactional website despite speculation that the value retailer was planning to.
John Bason, finance director at Primark owner Associated British Food said the trial would end within weeks. He declined to comment on why the partnership is coming to an end or what Primark’s next move would be other than to say that the tie-up was always designed as a trial and that it had taken some “good learnings” from it.
Primark took its first steps into online retail in early June when it launched on Asos. The trial, which grew to around 140 items, got off to a “phenomenal” start, Asos boss Nick Robertson told Retail Week in mid-June.
The partnership, which Primark said was designed to “give the company some insight into online retailing”, was thought by many in the industry to be a precursor to the value fashion retailer launching its own site.
Earlier this year, Primark supply chain boss Martin White said that it wanted to launch online but that it would not be able to trade profitably. He said its low prices posed profitability challenges online because of associated costs such as fulfilment.
The retailer revealed in a pre-close statement today that it expects total sales in the year to September 14 to be 22% ahead of last year’s £3.5bn, while like-for-likes are expected to rise 5%.
Bason said that the retailer had benefited from an uplift in consumer confidence following the economic recovery in the UK.
He said: “The wider influence has been with us for a little while. Disposable income stopped being squeezed at the end of 2012. Maybe there is a catch up in the sentiment.”
Bason said the retailer was feeling optimistic ahead of Christmas trading and would be opening more than 12 new stores in time to benefit from the festive surge.
The retailer said it had a very strong May, June and July which resulted in lower markdowns and the second-half margin will now be in line with the first half.
“We’ve always had a keen eye on trends. I think our buying has got even better,” said Bason.
The retailer, which is preparing to open its first French store in Marseille in December, said like-for-like growth in Spain, which was initially held back by the large number of new store openings, had improved.
Bason said it had benefited from a relaxation of trading laws in Spain. “It’s good to see Spain embracing change as a reaction to its economic situation,” he said.